Honor-based betting exchange

ABSTRACT

An honor-based betting exchange facilitates transactions connected with bets among members of the exchange. A member need not pay his losses but his behaviors on the exchange are tracked by his honor rating. The exchange allows bets to be listed in classes facilitating searches and sorts to be performed. Upselling is possible to attract a large number of bettors. Bet matching software determines redundant bets and bring these bets to the attention of bettors. Although fixed bets are possible, certain bets can be negotiated on the exchange.

TECHNICAL FIELD

The technical field relates generally to software, and moreparticularly, to an offline or online exchange for facilitatingtransactions connected to betting.

BACKGROUND

This background is provided to help the appreciation of thetechnological context. This background is neither intended to identifyfeatures of the claimed subject matter nor is it an admission of theprior art. Gambling means to risk or stake something of value upon theoutcome of a future event beyond one's control. Most betting isgambling, and as such, it is prohibited in many states. Not all bettingis gambling, however. If two persons bet on a Saturday morning round ofgolf, for example, they are not gambling because they control theoutcome. If these two persons then retire to the grill, and bet on afootball game on television, but make a handshake “just for the fin ofit” bet, they are not gambling because there is nothing of value atstake. Various embodiments of the present invention focus on a thirdtype of legal betting-betting without risk.

SUMMARY

This summary is provided to introduce a selection of concepts in asimplified form that are further described below in the DetailedDescription. This summary is not intended to identify key features ofthe claimed subject matter, nor is it intended to be used as an aid indetermining the scope of the claimed subject matter. A system, method,and computer-readable medium for betting is provided.

In accordance with this invention, a system form of the inventionincludes a computer system that comprises an exchange that facilitatestransactions connected with risk-free bets among members of theexchange. The system further comprises a piece of evaluation softwareexecuting on the computer system. The piece of evaluation softwareprovides an evaluation index for each member of the exchange, which isused to police risk-free bets on the exchange.

In accordance with further aspects of this invention, a method form ofthe invention includes a computer-implemented method that comprisesaccessing an honor-based betting exchange by a first member to acceptterms of an offer of a second member regarding a bet. The method furthercomprises rejecting the acceptance of the first member if a piece ofhonor rating software determines that an honor rating of the firstmember fails to meet an honor rating threshold specified by the secondmember. The honor rating is recalculated over time by the piece of honorrating software depending on wagering statistics and behaviors of thefirst member including his refusal to pay on the bet he wagered.

In accordance with further aspects of this invention, acomputer-readable medium form of the invention includes acomputer-readable medium having computer-executable instructions storedthereon for implementing a computer-implemented method. The methodcomprises accessing an honor-based betting exchange by a first member tospecify new terms different from terms of an offer of a second memberregarding a bet. The method further comprises accepting the new terms ofthe first member if the honor-based betting exchange determines that thenew terms are within an acceptable range and if a piece of honor ratingsoftware determines that an honor rating of the first member meets anhonor rating threshold specified by the second member.

DESCRIPTION OF THE DRAWINGS

The foregoing aspects and many of the attendant advantages of thisinvention will become more readily appreciated as the same become betterunderstood by reference to the following detailed description, whentaken in conjunction with the accompanying drawings, wherein:

FIG. 1 is a block diagram illustrating exemplary pieces of hardware andsoftware for faciliting transactions connected with bets in an exemplaryhonor-based betting exchange; and

FIGS. 5A-5AR are process diagrams for illustrating exemplary methods forfacilitating transactions connected with bets in an exemplary onlinehonor-based betting exchange.

DETAILED DESCRIPTION

FIG. 1 illustrates an exemplary system 100 where honor-based bets arefacilitated by an honor-based betting exchange 104. In one embodiment,the honor-based betting exchange 104 works offline when the honor-basedbetting exchange 104 is disconnected from a network. In a secondembodiment, the honor-based betting exchange 104 works online when thehonor-based betting exchange 104 is connected to a network, such as theInternet, an online service, or a service that uses modems. In bothembodiments, a number of bettors 102 a-102 c log on to the honor-basedbetting exchange 104 so as to gain access to it and its pieces ofsoftware 106-118.

The honor-based betting exchange 104 facilitates a community wherebettors 102 a-102 c may virtually meet to wager on any events theydesire. Bettors 102 a-102 c become members of the honor-based bettingexchange 104 by creating accounts and fund these accounts via theaccount software 112 so as to bet on various events and to post messageson message boards and blogs maintained by the honor-based bettingexchange 104. For a bettor 102 a-102 c to place a bet, his account musthave sufficient funds as managed by the account software 112. Eachaccount can be replenished by suitable financial means, such as by acredit card, a check, or an electronic payment. Bettors 102 a-102 c whoare members of the honor-based betting exchange 104 can wager with anyother members. In one embodiment, a bettor can create private bettinggroups on the honor-based betting exchange 104 to limit wagering to themembers of these private betting groups.

Each bet listed (sold) and accepted (purchased) on the honor-basedbetting exchange 104 is honor-based. In other words, each bet on thehonor-based betting exchange 104 is risk-free. As a member of thehonor-based betting exchange 104, a losing bettor is not obligated topay on his losses. In one embodiment, each bettor has an honor ratingcalculated by the honor rating software 118. In another embodiment, eachbettor has an evaluation index that is calculated by a piece ofevaluation software (not shown) and the evaluation index is similar tothe honor rating, albeit in a different manner. In a further embodiment,each bettor has a credit score that is calculated by a piece of creditworthiness software (not shown) and the credit score is similar to thehonor rating or the evaluation index, albeit in a different manner. Inall embodiments, the software-calculated honor ratings, evaluationindexes, and credit scores are mechanisms to serve as a policingfacility for risk-free betting on the system 100.

In an embodiment where an honor rating is used, each bettor who is amember of the honor-based betting exchange 104 may experience adeclining honor rating if other members of the honor-based bettingexchange 104 have had negative experiences with him. Viewing it in adifferent way, the honor-based betting exchange 104 together with otherpieces of hardware and software of the system 100, acts as anenforcement mechanism for members.

The honor rating software 118 assigns an honor rating to each member ofthe honor-based betting exchange 104, preferably on a sliding pointscale. This honor rating allows other members to assess thetrustworthiness of a member as a potential betting opponent. Onesuitable point scale includes a 10-point scale, but others may be used.The honor rating software 118 executes one or more mathematicalprocesses that take into account various factors including wageringstatistics and behaviors, such as bet amounts; a percentage of themaximum amount a bettor could bet; whether a bettor has a verifiablee-mail address; the feedback scores a bettor receives from other membersof the honor-based betting exchange 104; the frequency with which abettor withdraws or fails to settle bets; and the variation in terms ofbetting partners that a bettor has had; among many other factors.

There are several types of betting that are facilitated by thehonor-based betting exchange 104. One type is where a bettor who lists abet (a “seller”) dictates terms, such as the odds, rules, amount, and soon, that the seller will accept. Another type is where the seller listsa bet and dictates the terms and the range within each term he would belikely to accept. This latter type is appropriate for situations whereother bettors (“buyers”) may not take a bet that is fixed with termsthat are unacceptable. This latter type provides flexible terms withinwhich a negotiation ensues to reach terms that are acceptable to boththe seller and the buyer.

The honor-based betting exchange 104 allows a seller, such as bettors102 a-102 c, to specify those who can accept the listed bet and theamount of money wagered. In a person-to-person scenario, the seller mayspecify that only one buyer at a particular amount may accept the listedbet. In another scenario, the seller may specify that the listed bet mayhave one or more buyers at any given amount. For example, in a $500 bet,the seller can list the bet with the bet listing wizard 106 so that 10buyers can accept up to $50 increments. Alternatively, the seller canset it up so that any number of buyers can specify the amount of moneythey wish to bet.

When a bettor 102 a-102 c is ready to list a bet (in the idioms ofvarious embodiments of the present invention, a bettor who lists a betis a seller who sells a bet), the seller accesses the honor-basedbetting exchange 104 to access a bet forest 108. The bet forest 108 canbe implemented in a database. The database is basically a file composedof records, each containing fields together with a set of operations forsearching, sorting, recombining, and other functions. In this particularembodiment, the fields include the classes under which bets are listedand categorized.

Each class of the bet forest 108 includes a set of attributes, which areinherited by all bets listed within that particular class. Theseattributes help to make bets searchable and sortable within the betforest 108 by various variables, such as location, which describes apath from a root to a leaf of the bet forest 108; type, which is ataxonomic category for a set of bets, such as whether the winner of theNational Spelling Bee will be wearing glasses; and chance, whichincludes possibility categories of a particular outcome in an uncertainsituation among others.

Using the bet forest 108, the seller determines the class under which hewould like to list or sell his bet. To list a bet, the seller uses thebet listing wizard 106 to either manually write his own proposition orto automate the drafting of the proposition. The bet listing wizard 106allows the seller to fill in the blanks in the proposition sentence byactivating a pull-down menu to choose nouns, verbs, and numerical valuesthat form the proposition. For example, in the proposition sentence“Vijay Singh will finish in the top 10 of the 2006 Shell Houston Open,”the proper noun “Vijay Singh” is selectable by the seller, the verb“will” is also selectable by the seller, and the numerical value “10” isalso selectable by the seller using the bet listing wizard 106. In otherwords, the seller uses the bet listing wizard 106 to decide what hewants to bet, such as subject, odds, terms, and so on.

The seller also specifies how much he wants to bet. The bet listingwizard 106 works together with the account software 112 to determine thelimit with which the seller may bet. In one embodiment, the accountsoftware 112 limits the seller to one of two amounts, whichever isgreater. The first amount is a suitably fixed monetary amount, such as$100. The second amount is the sum total that the seller has wageredover a suitable period and for which the seller has received suitablefeedback scores based on his betting behavior. One suitable periodincludes 60 days but others may be used. In another embodiment. theabove rule for limiting the amount the seller can bet applies toindividual transactions. Thus, a bettor who has no history with thesystem 100 may make bets with greater amounts, but must break up theamount into smaller individual bets. For example, a new bettor using thehonor-based betting exchange 104 may not be able to wager $1,000 on asingle bet, but he may be able to wager ten bets, each bet amounting toabout $100.

The account software 112 checks the funds available to the particularseller, and the seller may not bet more than the funds available in hisaccount. To increase the amount that he may wager, the seller may haveto increase the funds in his account. Through the bet listing wizard106, the seller may also specify a minimum honor rating that a buyermust have to accept the seller's bet. Additionally, the seller may alsospecify whether he will only accept one buyer or whether the bet isavailable to many different buyers buying pieces of his bet. When theseller is finished specifying his bet with the bet listing wizard 106,the wizard communicates with the account software 112. The accountsoftware 112 debits a listing fee connected with the bet to be listed inthe bet forest 108. Moreover, the account software transfers the amountof the bet listed by the seller and a suitable matching fee from thefunds in the accounts of the seller into escrow. If the seller decidesto withdraw the listed bet from the bet forest 108 before the bet isbought or accepted by a buyer, the withdrawal software 114 helps theseller to remove the listed bet from the bet forest 108 without penalty.

A buyer accesses the honor-based betting exchange 104 to browse the betforest 108 to search for available bets to wager. Once the buyer findsan available bet, he may accept it if he is eligible to accept the bet.The honor-based betting exchange works together with the accountsoftware 112 and the honor rating software 118 to determine whether thebuyer is eligible to accept a bet on several suitable bases. One basisis whether the buyer's honor rating is too low, as indicated by thehonor rating software 118. Another basis, as indicated by the accountsoftware 112, is whether the buyer has sufficient funds in his accountto cover a possible loss. A third basis is whether the buyer's betmaximum is lower than the listed bet's minimum amount. The fourth basisis whether the buyer is a new member of the honor-based betting exchange104 in cases where the listed bet restricts these members fromparticipating. There are many other possible bases.

Once the system 100 determines that the buyer is eligible to accept thebet, the buyer's and the seller's accounts are debited by the amountsproffered. The seller's matching fee is transferred from escrow to anentity that is operating the system 100. The buyer's matching fee islikewise deducted from the buyer's account. In one embodiment, thesefees are nonrefundable. In other embodiments, the fees are refundable,depending on the circumstances, by the system 100.

The withdrawal software 114 aids both the seller and the buyer inwithdrawing their bets at any time prior to the time the bet is set toexpire. The withdrawal software 114 allows a non-withdrawing bettor togive feedback to the withdrawing bettor. The account software 112 notesthat the amount withdrawn would not count toward the total wageredamount in a desired period for the purpose of increasing the bet maximumamount.

The settlement software 116 is employed by the system 100 when theseller and the buyer wish to settle a bet. The settlement software 116can be used when bettors call for a settlement before the settlementdate. Two circumstances merit settling before the settlement date. Thefirst circumstance involves when it becomes impossible or nearlyimpossible for a bettor to win. For example, where a candidate forpresident dies before the election, it is unlikely that the deceasedwill be elected president. In this case, none of the bettors, either asseller or buyer, is likely to win. The second circumstance involves whenan event occurs sometime before the term date. For example, supposebettors bet on a certain person to be traded in baseball. The term dateis July 15, and the settlement date is July 16. The person of interestgets traded on June 25. Therefore, the bettors can settle the bet muchearlier.

The settlement software 116 is used by bettors 102 a-102 c, either asseller or buyer, for declaration of a win or a loss. In the case where asuitable period has passed after the settlement time, such as 72 hours,and where the first moving bettor claims a loss, the withdrawal software114 communicates with the account software 112 to transfer the betamount directly to the winning party's account. The withdrawal software114 will also automatically increase the honor rating of the losingbettor who claims the loss.

Where after a suitable period, such as 72 hours after the settlementtime, and where the first moving bettor claims a win, that bettor willbe caused to wait by the settlement software 116. If the settlementsoftware 116 determines that the opposing bettor claims a loss (in otherwords, he agrees with the opponent's assessment), the settlementsoftware 116 causes the account software 112 to transfer the bet amountdirectly to the winning party's account. Otherwise, if the opposingbettor claims a win, the settlement software 116 notifies both bettorsof the conflicting conclusion and indicates both bettors to come to aresolution using a bet message board provided by the honor-based bettingexchange 104.

If the opposing bettor does nothing in response to the other bettorclaiming a win, the settlement software 116 assumes that the opposingbettor agrees by silence that he has lost and communicates with theaccount software 112 to transfer the amount bet to the winning party'saccount. If more than a certain period has passed after the settlementtime, the settlement software 116 waits for the first moving bettor'sdeclaration of the outcome and assumes that the non-moving party, bysilence, agrees to be bound by the opponent's declaration. In thiscircumstance, the settlement software 116 communicates with the accountsoftware 112 to transfer the bet amount directly to the party whodeclares a win. In the situation where neither bettor acts to settle thebet within a desired period, such as within 72 hours of settlement time,each bettor's rights to enter into new bets in the system 100 aresuspended by the honor-based betting exchange 104 until the bet isresolved.

Members of the community facilitated by the honor-based betting exchange104 are not obligated to pay on their losses. As a bettor sells, buys,and settles his bets, feedback from others regarding the transactionpositively affects or negatively affects his honor rating. Negativefeedback may cause an honor rating of a bettor to fall. Individualfeedback scores are within a suitable range, such as 0 to 3. Otherranges are possible. In one embodiment, winning bettors may not leavefeedback where their opponent moved first and claimed a loss. Thehonor-based betting exchange 104 automatically assigns the losing bettorthe maximum feedback score, such as a 3 in this scenario. In anotherembodiment, if a bettor does not leave feedback on his opponent within asuitable period, such as within 30 days of the bet settlement time, thehonor-based betting exchange 104 automatically assigns the maximumscore, such as a 3.

FIGS. 5A-5AR illustrate a method 5000 for facilitating transactionsconnected with bets on an online honor-based betting exchange usingpieces of software. The method allows bettors to search a bet forest tolocate a class with which to place or list a bet and for others toaccept a listed bet. All bets are risk free in that a losing bettor isnot obliged to pay on his losses; however, his behaviors in the bettingprocess on the honor-based betting exchange are captured in his honorrating. From a start block, the method 5000 proceeds to a set of methodsteps 5002, defined between a continuation terminal (“Terminal A”) andan exit terminal (“Terminal B”). The set of method steps 5002 describeupdating a bet forest, such as the bet forest 108, which comprisestrees, each branch of the trees being a bet class extending into leavesat which bets are listed. As would be appreciated by one skilled in theart, the classes described below are for illustrative purposes. Otherclasses not mentioned here may be suitably used and some of thementioned classes need not be used. Even the organization of the classescan be changed from the organization discussed below.

From Terminal A (FIG. 5C), the method 5000 proceeds to block 5014 wherethe method checks for updates to bet classes, such as public interestand private interest, which are at the roots of the bet forest 108. Atblock 5016, under the bet class public interest, the method 5000 checksfor updates to bet sub-classes, such as arts and entertainment; businessand finance; news; and sports. Next, at block 5018, under the betsub-class arts and entertainment, the method checks for updates to betsub-classes movies; television; music; books; magazines; and literature.The method 5000 proceeds to block 5022 where under the bet sub-classmovies, the method checks for updates to bet sub-classes awards; boxoffice takes; and others. At block 5024, under the bet sub-classmovies/awards, the method checks for updates to bet sub-classes AcademyAwards; Golden Globe Awards; and Screen Actors Guild awards. Next, atblock 5026, under the bet sub-class movies/box office takes, the methodchecks for updates to bet sub-classes openings; second week take; andothers. The method then proceeds to a continuation terminal (“TerminalA1”).

From Terminal A1 (FIG. 5D), the method 5000 proceeds to block 5028 whereunder bet sub-class television, the method checks for updates to betsub-classes awards; ratings; and reality TV. At block 5030, underreality TV, updates are checked for various sub-classes (such asApprentice, The; Bachelor, The; Bachelorette, The; Big Break, The; BigBrother; Survivor; Amazing Race, The). Next, at block 5032, under betsub-class music, the method checks for updates to bet sub-class awards.Next, at block 5034, under bet sub-class music/awards, the method checksfor updates to bet sub-classes Grammy Awards; MTV Video Music Awards;and American Music Awards. The method proceeds to block 5036 where underthe bet sub-class celebrities, the method checks for updates to betsub-classes divorces and splits; deaths; and others. At block 5038,under the bet sub-class business and finance, the method checks forupdates to bet sub-classes markets and investing, such as stocks. Next,at block 5040, under the bet sub-class business and finance/markets, themethod checks for updates to bet sub-classes NYSE; NASDAQ; AMEX; andS&P. The method then continues to another continuation terminal(“Terminal A2”).

From Terminal A2 (FIG. 5E), the method 5000 proceeds to block 5042 whereunder the bet sub-class business and finance/investing, the methodchecks for updates to bet sub-classes real estate; interest rates;companies; and commodities. At block 5044, under the bet sub-class news,the method checks for updates to bet sub-classes current events;weather; law; politics; international; society and culture; and scienceand technology. At block 5046, under bet sub-class news/current events,the method checks for updates to bet sub-classes crime and trials; andothers. The method 5000 then proceeds to block 5048 where under betsub-class news/law, the method checks for updates to bet sub-classesSupreme Court; and others. At block 5050, under the bet sub-classnews/politics, the method checks for updates to bet sub-classeselections; appointments and nominations; Congressional votes; andothers. Next, at block 5052, under the bet sub-class politics/elections,the method checks for updates to bet sub-classes 2006 U.S. Senateelections; 2008 U.S. Presidential election; and others. The method thenproceeds to block 5054 where under the bet sub-classpolitics/appointments and nominations, the method checks for updates tobet sub-classes U.S. Supreme Court; President's Cabinet; and others. Themethod then proceeds to another continuation terminal (“Terminal A3”).

From Terminal A3 (FIG. 5F), the method 5000 proceeds to block 5056 whereunder the bet sub-class news/international, the method checks forupdates to bet sub-classes Iraq War; and others. At bock 5058, under thebet sub-class sports, the method checks for updates to bet sub-classesbaseball (MLB); boxing; hockey (NHL); auto racing; golf; basketball;football; and others. At block 5060, under bet sub-class baseball (MLB),the method checks for updates to bet sub-classes 2006 season; playersand managers; and teams. The method then proceeds to block 5062 whereunder bet sub-class baseball/2006 season, the method checks for updatesto bet sub-classes awards; division races; playoffs; regular seasongames; World Series; and others. At block 5064, under bet sub-classbaseball/players and managers, the method 5000 checks for updates to betsub-classes trades; releases and firings; and others. Next, at block5068, under bet sub-class baseball/teams, the method checks for updatesto bet sub-classes American League; and National League. The methodproceeds to block 5070 where under bet sub-class hockey, the methodchecks for updates to bet sub-classes 2005-06 season; players andcoaches. The method then continues to another continuation terminal(“Terminal A4”).

From Terminal A4 (FIG. 5G), the method 5000 proceeds to block 5072 whereunder the bet sub-class hockey/2005-06 season, the method checks forupdates to bet sub-classes awards; division races; NHL draft; StanleyCup playoffs; regular season games; and others. At block 5074, under thebet sub-class hockey/players and coaches, the method checks for updatesto bet sub-classes players; and coaches. Next, at block 5076, under betsub-class hockey/teams, the method checks for updates to bet sub-classesWestern Conference; and Eastern Conference. The method proceeds to block5078 where under bet sub-class sports/others, the method checks forupdates to bet sub-classes horse racing; tennis; Olympics; soccer; andother sports. At block 5080, under bet sub-class horse racing, themethod checks for updates to bet sub-classes Kentucky Derby, the;Belmont Stakes, the; Preakness, the; and others. Next, at block 5082,under bet sub-class sports/auto racing, the method checks for updates tobet sub-classes Indy Car; NASCAR; and others. The method proceeds toblock 5084 where under bet sub-class NASCAR, the method checks forupdates to bet sub-classes Nextel Cup; and Busch Series. The methodcontinues at another continuation terminal (“Terminal A5”).

From Terminal A5 (FIG. 5H), the method proceeds to block 5086 whereunder bet sub-class sports/golf, the method checks for updates to betsub-classes PGA Tour; LPGA Tour; Champion Tour; Nationwide Tour; andothers. At block 5088, under the bet sub-class PGA Tour, the methodchecks for updates to bet sub-classes world ranking; Ryder and PresidentCup; 2006 PGA Tour season; and others. Next, at block 5090, under betsub-class LPGA Tour, the method checks for updates to bet sub-classesawards; money lists; players; tournaments; and others. The methodproceeds to block 5092 where under bet sub-class sports/basketball, themethod checks for updates to bet sub-classes NBA; NCAA; and WNBA. Atblock 5094, under bet sub-class NBA, the method checks for updates tobet sub-classes 2005/06 season; teams; and players and coaches. Next, atblock 5096, under bet sub-class NCAA, the method checks for updates tobet sub-classes men's; and women's. The method proceeds to block 5098where under bet sub-class sports/football, the method checks for updatesto bet sub-classes NCAA; and NFL. The method continues at anothercontinuation terminal (“Terminal A6”).

From Terminal A6 (FIG. 5I), the method 5000 proceeds to block 5100 whereunder bet sub-class NFL, the method checks for updates to betsub-classes 2005 season; teams; and players and coaches. At block 5102,under the bet class private interests, the method checks for updates tobet sub-classes sports; business; relationships; and others. The methodthen continues to exit Terminal B. Various classes and sub-classes havebeen discussed, but these are mere illustrations and there can be manymore suitable classes and sub-classes not mentioned above. Variousembodiments of the present invention are not limited to theabove-described classes and sub-classes but can include any classes andsub-classes on which bettors may list or accept bets.

From Terminal B (FIG. 5A), the method proceeds to a set of method steps5004, defined between a continuation terminal (“Terminal C”) and an exitterminal (“Terminal D”). The set of method steps 5004 describes that abettor, such as bettors 102 a-102 c, who wishes to list a bet, browsesthrough the bet forest 108 to find a branch at which to list a bet.

From Terminal C (FIG. 5I), a person listing a bet (bet seller) finds anhonor-based betting exchange, such as the honor-based betting exchange104, on the Internet (e.g., using a suitable uniform resource locator).At block 5106, the bet seller browses through the bet forest, such asthe bet forest 108, by classes, such as public interest or privateinterest, and among many sub-classes to find a location at which to lista bet. The bet forest 108 is searchable and sortable across manydifferent dimensions. For example, the bet seller may find a location atwhich to list a bet using a path, such as the following path: “publicinterest>sports>PGA Tour>2006 season>regular events>Shell HoustonOpen>player performances>player finish (over/under).” Thus, location isone dimension. Another suitable dimension is to search or sort by type:mainstream type, such as bets which particulars are recognized, areconventional, or are established for particular subject matter; exotic,such as bets which particulars depart from those recognized,conventional, or established for bets of particular subject matter;kinda, such as an opening coin toss in a football game; somewhat, suchas the person who kicks the first field goal in a football game; orextremely, such as whether the winner of the National Spelling Bee willbe wearing glasses once he spells the winning word. Chance is anotherdimension, which is based on the level of skill: high, such as cointosses for which no amount of research or preparation by a bettor willmake a difference in his chance; medium, such as bets that have somedegree of chance; and low, such as bets for which some knowledge ishelpful (point spreads in a football game among other things). Themethod 5000 then continues to another continuation terminal (“TerminalC2”).

From Terminal C2 (FIG. 5J), the method proceeds to decision block 5110where a test is performed to determine whether the bet seller has founda bet sub-class to list a bet. If the answer to the question at decisionblock 5110 is YES, the method continues to another continuation terminal(“Terminal C3”). Otherwise, the method proceeds to another continuationterminal (“Terminal C1”). From Terminal C1 (FIG. 5I), the method 5000skips to block 5106 where the above-identified processing steps arerepeated.

From Terminal C3 (FIG. 5K), the bet seller selects a hyperlinkindicating an intention to list a bet with the honor-based bettingexchange on a Web page presented to the bet seller by the honor-basedbetting exchange 104. At decision block 5114, a test is performed todetermine whether the bet seller is a member of the honor-based bettingexchange. If the answer to the test at decision block 5114 is YES, themethod 5000 proceeds to another continuation terminal (“Terminal C4”).If the answer to the test at decision block 5114 is NO, the methodproceeds to block 5116 where the honor-based betting exchange, at thebet seller's request, creates an account for the bet seller. The betseller provides identifying information including an alias and apassword, and finds the account by various financial methods, such as bycredit card. Next, at block 5120, the honor-based betting exchange setsthe honor rating of the newly created account to a suitable level, suchas zero, and sets the betting limit to a suitable amount, such as $100.Other suitable levels and other suitable amounts may be used. The methodthen proceeds to Terminal C4.

From Terminal C4 (FIG. 5L), the method 5000 proceeds to block 5122 wherethe bet seller selects a characteristic of the bet, the characteristicbeing a “nail it down” bet; or a “negotiable” bet. A nail-it-down bet iswhere a bettor who lists a bet (a “seller”) dictates terms, such as theodds, rules, amount, and so on, that the seller will accept. Anegotiable bet is where the seller lists a bet and dictates the termsand the range within each term he would be likely to accept. The methodproceeds to decision block 5124 where a test is performed to determinewhether the selected characteristic is a nail-it-down bet. If the answerto the test at decision block 5124 is NO, the method 5000 proceeds toanother continuation terminal (“Terminal C5”). Otherwise, if the answeris YES to the test at decision block 5124, the method proceeds to block5126 where the bet listing wizard 106, such as a natural language tool,appears to help the bet seller write a bet proposition sentence (whichthe user can opt out of and draft by freehand). At block 5128, the betseller specifies the verb of the bet and the object of the bet. Next, atblock 5130, the bet seller specifies the odds of the bet and the amountof the bet. The method then continues to another continuation terminal(“Terminal C6”).

From Terminal C5 (FIG. 5M), the method 5000 proceeds to decision block5132 where a test is performed to determine whether the selectedcharacteristic is a negotiable bet. If the answer to the test atdecision block 5132 is NO, the method proceeds to Terminal C4 where theabove-identified processing steps are repeated. Otherwise, if the answerto the test at decision block 5132 is YES, the method proceeds to block5134 where the bet listing wizard 106, such as a natural language tool,appears to help the bet seller write a bet proposition sentence. The betseller specifies the verb of the bet and the object of the bet at block5136. Next, at block 5138, the bet seller specifies the odds of the betand a range of acceptable odds. The method proceeds to block 5140 wherethe bet seller specifies the amount of the bet and the range ofacceptable amounts. At block 5142, the bet seller specifies otherobjects of the bet, such as point spread, and the range of acceptablevalues of these objects. The method then continues to Terminal C6.

From Terminal C6 (FIG. 5N), the method 5000 proceeds to block 5144 wherethe bet seller specifies through the method the number of bet buyers whocan accept the bet. At decision block 5146, a test is performed todetermine whether the bet seller specifies only one bet buyer. If theanswer to the test at decision block 5146 is YES, the method 5000proceeds to another continuation terminal (“Terminal C7”). Otherwise, ifthe answer to the test at decision block 5146 is NO, another decisionblock 5148 is entered in which a test is performed to determine whetherthe bet seller specifies only a fixed number of buyers. If the answer tothe test at decision block 5148 is YES, the method 5000 proceeds toblock 5150 where the bet seller specifies a fixed number of bet buyersat a fixed betting amount. The method then continues to Terminal C7. Ifthe answer to the test at decision block 5148 is NO, the method 5000proceeds to block 5152 where the bet seller specifies a variable numberof buyers for varying betting amounts. The method then continues toTerminal C7.

From Terminal C7 (FIG. 5O), the method 5000 proceeds to block 5154 wherethe method calculates the bet seller's maximum wager amount, which is asum of all bets he had concluded over a certain time period, such aswithin 60 days. At decision block 5146, the method 5000 performs a testto determine whether the bet amount to be listed is greater than themaximum wager amount. If the answer to the test at decision block 5146is YES, the method 5000 prompts the bet seller to specify a lower amountthrough the honor-based betting exchange 104. See block 5148. If theanswer to the test at decision block 5146 is NO, the method proceeds todecision block 5150 where a test is performed to determine whether thebet seller has bet more than the funds in his account. If the answer tothe test at decision block 5150 is YES, the method proceeds to block5152 where the method 5000 prompts the bet seller to increase the fundsin his account. Otherwise, if the answer to the test at decision block5150 is NO, the method continues to another continuation terminal(“Terminal C8”).

From Terminal C8 (FIG. 5P), the bet seller sets an honor ratingthreshold for bet buyers who may accept the bet. See block 5154. Atblock 5156, the bet seller specifies (and a default is provided by themethod if none is specified) a closing time after which no more offersor counteroffers will be accepted. The method 5000 proceeds to block5158 where the bet seller specifies a settlement time (which cannot beless than a suitable time period, such as 72 hours) for the bettor tosettle the bet before betting privileges are suspended. The methodcontinues to exit Terminal D.

From Terminal D, the method 5000 proceeds to a set of method steps 5006,defined between a continuation terminal (“Terminal E”) and an exitterminal (“Terminal F”). The set of method steps 5006 describe theexecution of a matching algorithm to eliminate the possibility ofoverlapping listings.

From Terminal E (FIG. 5P), the method 5000 proceeds to block 5160 wherethe method 5000 searches for another bet that may be a match to the betto be listed by the bet seller. At block 5162, the method 5000 looks atbet sentences whose difference is a mutually exclusive subject. Themethod then continues to another continuation terminal (“Terminal E I”).

From Terminal E1 (FIG. 5Q), the method 5000 proceeds to decision block5164 where a test is performed to determine whether there is a match. Ifthe answer to the test at decision block 5164 is YES, the methodcontinues to another continuation terminal (“Terminal C9”). If theanswer to the test at decision block 5164 is NO, the method continues toblock 5166 where the method 5000 looks at bet sentences whose differenceis a mutually exclusive object (e.g., scores). The method then proceedsto decision block 5168 to determine whether there is a match. If theanswer is YES to the test at decision bock 5168, the method continues toTerminal C9. Otherwise, if the answer to the test at decision block 5168is NO, the method 5000 looks at bet sentences whose difference is anobject whose range of values is specified by another object. See block5170. The method then continues to another continuation terminal(“Terminal E2”).

From Terminal E2 (FIG. 5R), the method 5000 proceeds to decision block5172 where a test is performed to determine whether there is a match. Ifthe answer to the test at decision block 5172 is YES, the methodcontinues to Terminal C9. Otherwise, if the answer to the test atdecision block 5172 is NO, the method continues to another continuationterminal (“Terminal C10”).

From Terminal C9 (FIG. 5R), the method 5000 proceeds to decision block5174 where a test is performed to determine whether the bet seller stillwishes to list his own bet. If the answer to the test at decision block5174 is YES, the method proceeds to Terminal C10. Otherwise, if theanswer is NO to the test at decision block 5174, the method 5000proceeds to block 5176 where the method presents the matched bet for thebet seller to consider betting. The method then continues to exitTerminal F. One example of a match includes the following bet sentence,“Vijay Singh will finish in the top five of the Shell Houston Open.”Another bet seller has already listed the following bet sentence, “VijaySingh will not finish in the top five of the Shell Houston Open.” Inthis particular case, the system 100 will make a suggestion to the betseller that he look at the second bet sentence before listing his own.

From Terminal C10 (FIG. 5S), the amount of the seller's bet is deductedfrom his account and put into a bet escrow connected with a listed bet.See block 5178. At block 5180, the bet seller is charged a listing feefor listing a bet in a particular category. Additionally, a matching feeis also removed from the bet seller's account and put into escrowconnected with the listed bet. The method 5000 then proceeds to decisionblock 5182 where a test is performed to determine whether the sellerwishes to up-sell to other categories. If the answer to the test atdecision block 5182 is NO, the method continues to exit Terminal F.Otherwise, if the answer to the test at decision block 5182 is YES, themethod 5000 proceeds to block 5184 where the bet seller specifies one ormore categories to up-sell so as to bring higher visibility to his bet.At block 5186, the method charges a fee for up-selling the bet to one ormore categories. The method continues to exit Terminal F.

From exit Terminal F, the method 5000 proceeds to another continuationterminal (“Terminal G”). From Terminal G (FIG. 5B), the method 5000proceeds to a set of method steps 5008, defined between a continuationterminal (“Terminal H”) and an exit terminal (“Terminal I”). The set ofmethod steps 5008 describes another person, who is a bet buyer, as hebrowses through the bet forest to find one or more bets to wager.

From Terminal H (FIG. 5T), a person wishing to bet (bet buyer) finds anhonor-based betting exchange, such as the honor-based betting exchange104, on the Internet (e.g., using a suitable uniform resource locator).At block 5190, the bet buyer browses through a bet forest, such as thebet forest 108, to find a desired bet listing. Next, at block 5108, thebet buyer browses through the bet forest by suitable event times, suchas today's events; events in the next seven days; next 30 days; ongoingevents; and other future events. Other suitable events divided by timeare possible. At bock 5192, the bet buyer browses through the bet forestby suitable betting amounts, such as up to $50; between $51 and $100;between $101 and $250; between $251 and $500; between $501 and $1,000;and over $1,000. Other suitable amounts are possible. At block 5194, thebet buyer browses through the bet forest by suitable odds, such as 1:20and lower; between 1:10 and 1:19; between 1:5 and 1:9; between 1:1 and1:5; 1:1; between 1:1 and 5:1; between 5:1 and 9:1; between 10:1 and19:1; between 20:1 and higher. Other suitable odds are possible. Atblock 5196, the bet buyer browses through the bet forest by the closingtime of bets, such as within the hour; today; or this week. Othersuitable closing times are possible. At block 5198, the bet buyerbrowses through the bet forest by suitable attributes, such as bysubject; by type (staples, exotics, somewhat, very); by chance (high,medium, low); and by gender interest (him, her, everyone). Othersuitable attributes are possible. At block 5200, the bet buyer browsesthrough the bet forest by suitable events, such as big events, everydayevents, and events that are off the beaten path. Other suitable eventsare possible. The method then continues to another continuation terminal(“Terminal H0”).

From Terminal H0 (FIG. 5U), the method 5000 proceeds to decision block5202 where a test is performed to determine whether the bet buyer hasfound a desired bet listing. If the answer to the test at decision block5202 is NO, the method continues to another continuation terminal(“Terminal H1”). The method then skips to block 5190 (FIG. 5T) where theabove-identified processing steps are repeated. If the answer to thetest at decision block 5202 is YES, the method 5000 proceeds to block5204 where the bet buyer selects the bet and the method brings the betbuyer to a product page detailing the bet on the honor-based bettingexchange 104. At block 5206, if various terms of the bet are negotiable,the bet buyer can select alternative values from a dropdown menu forthese various terms. Collectably, these terms constitute a counterofferby the bet buyer. The method 5000 then continues to another continuationterminal (“Terminal H2”).

From Terminal H2 (FIG. 5V), the method 5000 proceeds to decision block5208 where a test is performed to determine whether the counteroffersare acceptable to the bet seller. If the answer to the test at decisionblock 5208 is NO, the method 5000 proceeds to Terminal H1 and skips backto block 5190 where the above-identified processing steps are repeated.If the answer to the test at decision block 5208 is YES, the methodcontinues to another decision block 5210 where another test is performedto determine whether the bet buyer accepts the bet. If the answer to thetest at decision block 5210 is NO, the method 5000 proceeds to TerminalH1 and skips back to block 5190 where the above-identified processingsteps are repeated. Otherwise, if the answer to the test at decisionblock 5210 is YES, the method continues to decision block 5212 where athird test is performed to determine whether the bet buyer hassufficient finds in his account. If the answer to the test at decisionblock 5212 is NO, the method continues to another continuation terminal(“Terminal H3”). If the answer to the test at decision block 5212 isYES, the method continues to another continuation terminal (“TerminalH5”).

From Terminal H3 (FIG. 5W), the method continues to block 5214 where thebet buyer is requested to increase the funds available in his account.The method then continues to another continuation terminal (“TerminalH4”) and skips back to block 5212 (FIG. 5V), where the above-identifiedprocessing steps are repeated.

From Terminal H5 (FIG. 5W), the method 5000 proceeds to decision block5216 where a test is performed to determine whether the bet buyer's betamount exceeds a limit on the account. If the answer to the test atdecision block 5216 is YES, the method continues to block 5218 where themethod requests the bet buyer to choose another bet with a lower amountthreshold. The method then continues to Terminal H1 and skips back toblock 5190 where the above-identified processing steps are repeated.Otherwise, if the answer to the test at decision block 5216 is NO, themethod proceeds to block 5220, and the buyer's bet amount is deductedfrom his account and put into the escrow connected with the bet. Themethod 5000 also takes a matching fee from the account of the bet buyer.See block 5222. Alternatively in another embodiment, the method takes apro rata percentage of the overall value of the bet as a matching fee inanother embodiment. The method 5000 then proceeds to exit Terminal I.

From exit Terminal I (FIG. 5B), the method 5000 proceeds to a set ofmethod steps 5010, defined between a continuation terminal (“TerminalJ”) and an exit terminal (“Terminal K”). The set of method steps 5010describes the determination of whether there has been a withdrawal of abet from either the seller or the buyer.

From Terminal J (FIG. 5X), the method 5000 proceeds to decision block5224 where a test is performed to determine whether the bet sellerwishes to cancel the bet. If the answer to the test at decision block5224 is NO, the method 5000 proceeds to another continuation terminal(“Terminal J1”). Otherwise, if the answer to the test at decision block5224 is YES, another decision block is entered where another test isperformed to determine whether there has been an acceptance of the bet.See decision block 5226. If the answer to the test at decision block5226 is YES, the method continues to another continuation terminal(“Terminal J2”). Otherwise, if the answer to the test at decision block5226 is NO, the method continues to block 5228 where the method removesthe bet from the bet forest. At block 5230, the method returns the betamount to the bet seller, but the listing fee is still charged. Themethod then continues to another continuation terminal (“Terminal L6”).

From Terminal J1 (FIG. 5Y), the method 5000 proceeds to decision block5232 where a test is performed to determine whether the bet buyer wishesto cancel the bet. If the answer to decision block 5232 is NO, themethod continues to exit Terminal K. Otherwise, if the answer to thetest at decision block 5232 is YES, another decision block is enteredand a test is performed to determine whether the closing time hasexpired. See decision block 5234. If the answer to the test at decisionblock 5234 is YES, the method continues to Terminal J2. Otherwise, ifthe answer to the test at decision block 5234 is NO, the methodcontinues to block 5236 where the method returns the bet amount to thebuyer but charges a matching fee, as well as assigning the minimumfeedback index, such as 0, to the withdrawing buyer. At block 5238, thebet seller's bet remains in the bet forest and his matching fee is keptfor a potential match.

From Terminal J2 (FIG. 5Z), the method 5000 proceeds to decision block5240 where a test is performed to determine whether the seller iswithdrawing. If the answer to the test at decision block 5240 is YES,the method removes the bet from the bet forest and assigns the minimumfeedback index (such as zero) to the withdrawing seller. See block 5242.The method then continues to another continuation terminal (“TerminalJ3”). If the answer to the test at decision block 5240 is NO, the methodcontinues to decision block 5244 where a test is performed to determinewhether the buyer is withdrawing. If the answer to the test at decisionblock 5244 is YES, the method assigns the minimum feedback index, suchas zero, to the withdrawing buyer. See block 5246. Otherwise, if theanswer to the test at decision block 5244 is NO, the method returns thebet amount, but not the fees incurred, such as the matching fee. Seeblock 5248. The method then continues to Terminal L6. From block 5242,the method 5000 proceeds to Terminal J3 and skips to block 5248 wherethe processing steps are repeated. From exit Terminal K (FIG. 5B), themethod 5000 proceeds to a set of method steps 5012, defined between acontinuation terminal (“Terminal L”) and an exit terminal (“TerminalM”). The set of method steps 5012 describe the monitoring of theresolution of the bet by the bet seller and the bet buyer.

From Terminal L (FIG. 5AA), the method 5000 proceeds to decision block5250 where a test is performed to determine whether the settlementperiod has expired. If the answer to the test at decision block 5250 isYES, the method continues to another continuation terminal (“TerminalL3”). Otherwise, if the answer to the test at decision block 5250 is NO,the method continues to another decision block where another test isperformed to determine whether a bettor has declared “I lost.” Seedecision block 5252. If the answer to the test at decision block 5252 isNO, the method continues to another continuation terminal (“TerminalL1”). If the answer to the test at decision block 5252 is YES, themethod 5000 proceeds to block 5254 where the method transfers the escrowamount to the winning bettor's account. At block 5256, the method 5000automatically assigns the maximum feedback index, such as 3, to thelosing bettor, which is helpful in an honor rating calculation. Themethod then continues to another continuation terminal (“Terminal L5”).

From Terminal L1, (FIG. 5AB), the method 5000 proceeds to decision block5258, where a test is performed to determine whether a bettor hasdeclared “I won.” If the answer to the test at decision block 5258 isNO, the method continues to Terminal L and skips back to decision block5250 where the above-identified processing steps are repeated. If theanswer to the test at decision block 5258 is YES, the method continuesto decision block 5260 where another test is performed to determinewhether the other bettor has declared “I lost.” If the answer to thetest at decision block 5260 is NO, the method continues to anothercontinuation terminal (“Terminal L2”). If the answer to the test atdecision block 5260 is YES, the method transfers the escrow amount tothe winning bettor's account. See block 5262. At block 5264, the methodautomatically assigns the maximum feedback index such as 3 to the losingbettor, which is helpful in an honor rating calculation. The method thencontinues to another continuation terminal (“Terminal L5”).

From Terminal L2 (FIG. 5AC), the method 5000 proceeds to decision block5266 where a test is performed to determine whether a time period beyondthe settlement period has expired, such as 72 hours. If the answer tothe test at decision block 5266 is NO, the method proceeds to anothercontinuation terminal (“Terminal L4”). From Terminal L4 (FIG. 5AB) themethod proceeds to decision block 5260, where the above-identifiedprocessing steps are repeated. Otherwise, if the answer to the test atdecision block 5266 is YES, the method proceeds to decision block 5268,where a test is performed to determine whether the silent bettorobjected to a transfer of the escrow amount. If the answer to the testat decision block 5268 is YES, the method proceeds to block 5270 wherethe method marks the bettor as unwilling to settle a bet for laterrating analysis and communicates with both the bet seller and the betbuyer to settle the bet outside of the system 100. The method thencontinues to terminal L6. If the answer to the test at decision block5268 is NO, the method transfers the escrow amount to the winningbettor's account and assigns the lowest feedback index, such as zero, tothe losing bettor. See block 5272. The method then continues to TerminalL6.

From Terminal L3 (FIG. 5AD) the method 5000 proceeds to decision block5274 where a test is performed to determine whether a bettor hasdeclared that “I won.” If the answer to the test at decision block 5274is NO, the method then proceeds to Terminal L3 where theabove-identified processing steps are repeated. If the answer to thetest at decision block 2574 is YES, the method proceeds to decisionblock 5276 where a test is performed to determine whether the silentbettor objected to a transfer of the escrow amount. If the answer to thetest at decision block 2576 is YES, the method at block 5278 marks thebettor as unwilling to settle a bet for later rating analysis andcommunicates with both the bet seller and the bet buyer to settle theirbet outside of the system 100. The method 5000 then proceeds to terminalL6. If the answer to the test at decision block 5276 is NO, the methodat block 5280 transfers the escrow amount to the winning bettor'saccount. The method then proceeds to terminal L6.

From Terminal L5 (FIG. 5AE), the method 5000 proceeds to decision block5282, where a test is performed to determine whether the losing bettorhas provided feedback to the winner. If the answer to the test atdecision block 5282 is YES, the method records the feedback pointsprovided by the losing bettor to the winning bettor. See block 5284. Themethod then continues to Terminal L6. If the answer to the test atdecision block 5282 is NO, the method continues to decision block 5286where another test is performed to determine whether a default period oftime has expired. If the answer to the test at decision block 5286 isYES, the method assigns the winning bettor with the maximum feedbackindex, such as 3. See block 5288. The method then continues to TerminalL6. If the answer to the test at decision block 5286 is NO, the methodcontinues to Terminal L5 and skips back to decision block 5282 where theabove-identified processing steps are repeated.

From Terminal L6 (FIG. 5AF), the method 5000 proceeds to decision block5290 where a test is performed to determine whether it is time torecalculate a bettor's honor rating. If the answer to the test atdecision block 5290 is NO, the method continues to Terminal C and skipsback to block 5104 (FIG. 5I) where the above-identified processing stepsare repeated. Otherwise, if the answer to the test at decision block5290 is YES, the method continues to decision block 5292 where a test isperformed to determine whether history shows that the bettor made atleast five bets. If the answer to the test at decision block 5292 is NO,the method continues to another continuation terminal (“Terminal L8”).Otherwise, if the answer to the test at decision block 5292 is YES, themethod continues to block 5294, where, for the most recent bets (such asfive bets), the method takes the product formed from an amount and thefeedback index connected with the bet. At block 5296, each product issummed by the method 5000 to form received feedback points. The methodthen continues to another continuation terminal (“Terminal L7”).

From Terminal L7 (FIG. 5AG), the method 5000 proceeds to block 5298where for the most recent bets, such as five bets, the method takes theproduct formed from a bet amount and the maximum possible feedbackindex, and each product is summed at block 5300 by the method to formpossible feedback points. At block 5302, the method calculates aquotient formed from the received feedback points (as a dividend), andthe possible feedback points (as a divisor). At block 5304, the methodcalculates a first summand for the last five bets multiple by taking aproduct from a last five average range value and the above quotient. Themethod at block 5306 calculates a second summand by using a last fiveaverage minimum value. At block 5308, a sum representing the last fivebets multiple is calculated using the first and second summand. Themethod 5000 then proceeds to another continuation terminal (“TerminalL8”).

From Terminal L8 (FIG. 5AH), the method 5000 proceeds to decision block5310 where a test is performed to determine whether the e-mail addressof the bettor can be verified. If the answer to the test at decisionblock 5310 is NO, the method assigns a minimum value, such as 0, to thee-mail verification factor. See block 5312. The method then continues toanother continuation terminal (“Terminal L9”). If the answer to the testat decision block 5310 is YES, the method proceeds to block 5314 wherethe method assigns a maximum value (such as 2) to the e-mailverification factor. The method 5000 continues to Terminal L9.

From Terminal L9 (FIG. 5AI) the method 5000 proceeds to block 5316where, for all bets ever taken by the bettor, the method takes a productformed from an amount of each bet and the maximum possible feedbackindex. At block 5318, each product is summed by the method to form thetotal possible feedback points. Next, at block 5320, for all bets evertaken by the bettor, the method takes a product formed from an amount ofeach bet and the received feedback index. Each product is then summed bythe method to form the total received feedback points. See block 5322.At block 5324, the method calculates a quotient formed from the totalreceived feedback points (as a dividend) and the total possible feedbackpoints (as a divisor). Next, at block 5326, the quotient is labeled asthe feedback average. The method 5000 then continues to anothercontinuation terminal (“Terminal L10”).

From Terminal L10 (FIG. 5AJ), the method proceeds to block 5328 wherethe method counts the number of “zero” instances of feedback received bythe bettor. At block 5330, the method counts the total number of betshistorically placed by the bettor. The method then calculates a quotientformed from the number of “zero” instances of feedback (as a dividend)and the number of bets historically placed (as a divisor). See block5332. The method proceeds to block 5334 where the method calculates awelch product formed from the quotient and a welch factor. At block5336, the method counts the number of withdrawals by the bettor. Themethod 5000 then counts the total number of bets historically placed bythe bettor. See block 5338. The method 5000 proceeds to block 5340 wherethe method calculates a quotient formed from the number of withdrawals(as a dividend) and the number of bets historically placed (as adivisor). At block 5342, the method calculates a withdrawal productformed from the quotient and a withdrawal factor. The method 5000 thencontinues to another continuation terminal (“Terminal L1”).

From Terminal L11 (FIG. 5AK), the method 5000 proceeds to block 5344where the method calculates a weighted sum formed from the welch productand the withdrawal product. At block 5346, the method calculates acombined welch/withdrawal product by using the weighted sum as amultiplicand and a combined welch/withdrawal factor as anothermultiplicand. The method 5000 calculates a welch/withdrawal sum formedfrom the welch factor and the withdrawal factor. See block 5348. Atblock 5350, the method calculates a quotient formed from the combinedwelch/withdrawal product (as a dividend) and the welch/withdrawal sum(as a divisor). At block 5352, the method labels the resulting quotientas welch/withdrawal multiple. The method 5000 continues to anothercontinuation terminal (“Terminal L12”).

From Terminal L12 (FIG. 5AL), the method 5000 proceeds to block 5354where the method calculates the number of different betting partners thebettor has associated with over his history of using the exchange. Atblock 5356, the method calculates the number of bets the bettor hasplaced using the exchange. The method then calculates a quotient formedfrom the number of different betting partners (as a dividend) and thenumber of bets (as a divisor). See block 5358. The method then proceedsto block 5360 where the method determines a betting partner varietyfactor. At block 5362, the method calculates a product formed from thequotient and the betting partner variety factor. The method 5000 thenlabels the resulting product as a betting partner variety score. Seeblock 5364. The method 5000 then continues at another continuationterminal (“Terminal L13”).

From Terminal L13 (FIG. 5AM), the method 5000 proceeds to block 5366where the method calculates a maximum sum where each summand of the sumis the maximum bet that the bettor could have placed in his bettinghistory on the honor-based betting exchange. At block 5368, the methodcalculates an actual sum where each summand of the sum is the actual betamount that the bettor placed in his betting history. The method thencalculates a quotient formed from the actual sum (as a dividend) and themaximum sum (as a divisor). See block 5370. The method proceeds to block5372 where the method determines an aggressiveness factor. At block5374, the method calculates a product formed from the quotient and theaggressiveness factor. The method then labels the resulting product asan aggressiveness quotient. See block 5376. The method 5000 thencontinues to another continuation terminal (“Terminal L14”).

From Terminal L14 (FIG. 5AN), the method 5000 proceeds to block 5378where the method calculates a number of settled bets that the bettorresolved quickly, such as within 24 hours, in his betting history on thehonor-based betting exchange. At block 5380, the method calculates thetotal number of bets that the bettor has placed in his betting historyon the honor-based betting exchange. The method then calculates asettled quotient formed from the number of settled bets (as a dividend)and the total number of bets (as a divisor). See block 5382. The method5000 proceeds to block 5384 where the method calculates a number of betsthat the bettor was the first to settle in his betting history on theexchange. At block 5386, the method calculates a first quotient formedfrom the number of bets settled first by the bettor (as a dividend) andthe total number of bets (as a divisor). At block 5388, the methodcalculates a speed quotient formed from the sum of the settled and firstquotients (as a dividend) and a perfect score factor (as a divisor). Themethod 5000 calculates a product formed from the speed quotient and aspeed average factor. See block 5390. At block 5392, the method labelsthe resulting product as a speed score. The method 5000 continues toanother continuation terminal (“Terminal L15”).

From Terminal L15 (FIG. 5AO), the method 5000 proceeds to block 5394where the method calculates the number of different betting partners thebettor has associated with over a recent period of time, such as within30 days. Other periods of time are possible. At block 5396, the methodcalculates a bettor quotient formed from the number of different bettingpartners (as a dividend) and a recent bettor factor (as a divisor). Themethod 5000 then calculates the number of bets the bettor has placedover the recent period of time. See block 5398. The method proceeds toblock 5400 where a bet quotient is formed from the number of bets (as adividend) and a recent bet factor (as a divisor), the bet quotient beinglimited to 1 if its original value is greater than 1. At block 5402, arecent quotient is formed from a sum of the bettor and bet quotients(dividend) and a recent perfect factor (divisor). A product is formedfrom the recent quotient acting as the multiplicand and anothermultiplicand formed from a recent significant factor. See block 5404. Atblock 5406, the method labels the resulting product as a short-termactivity score. The method then continues to another continuationterminal (“Terminal L16”).

From Terminal L16 (FIG. 5AP), the method 5000 proceeds to block 5408where the method calculates the number of different betting partners thebettor has associated with over a medium period of time, such as 180days. Other medium periods of time are possible. At block 5410, a bettorquotient is formed from the number of betting partners (dividend) and amedium bettor factor (divisor), the quotient being limited to 1 if itsoriginal value is greater than 1. The method then calculates the numberof bets the bettor has placed over this medium period of time. See block5412. The method proceeds to block 5414 where a bet quotient is formedfrom the number of bets (as a dividend) and a medium bet factor (as adivisor), the bet quotient being limited to 1 if its original value isgreater than 1. A medium quotient is formed from a sum of the bettor andbet quotients (dividend) and a medium perfect factor (divisor). Seeblock 5416. The method proceeds to block 5418 where a product is formedfrom the medium quotient acting as the multiplicand and anothermultiplicand formed from a medium significant factor. At block 5420, themethod labels the resulting product as a medium-term activity score. Themethod then proceeds to another continuation terminal (“Terminal L17”).

From Terminal L17 (FIG. 5AQ), the method 5000 proceeds to block 5422where for all bets in history, a first sum of products is calculated,each product being formed from the feedback and the bet amount for aparticular bet. At block 5424, for all bets in history, a second sum ofproducts is calculated, each product being formed from the maximumpossible feedback and the bet amount for a particular bet. A quotient isthen formed from the first sum of products (as a dividend) and thesecond sum of products (as a divisor). See block 5426. The method thenproceeds to block 5428 where the method determines a feedback factor. Atblock 5430, a product is formed from the quotient as a multiplicand andanother multiplicand formed from the feedback factor. The methodproceeds to block 5440 where the method labels the resulting product asa feedback score.

From Terminal L18 (FIG. 5AR), the method proceeds to block 5444 where afirst component of the honor rating is formed from a product of theperformance average and the feedback average. At block 5446, a secondcomponent of the honor rating is a remainder formed from the firstcomponent of the honor rating (minuend) and the welsh/withdrawalmultiple (subtrahend). The third component is a product formed from theremainder and the last five bets multiple. See block 5448. The methodproceeds to block 5450 where the fourth component is a sum of the e-mailverification factor and the product formed from the remainder and thelast five bets multiple. At block 5452, the fourth component is labeledas the honor rating for the bettor. The method 5000 then proceeds toexit Terminal M and terminates execution.

While illustrative embodiments have been illustrated and described, itwill be appreciated that various changes can be made therein withoutdeparting from the spirit and scope of the invention.

-   -   The embodiments of the invention in which an exclusive property        or privilege is claimed are defined as follows:

1. A computer system, comprising: an exchange that facilitatestransactions connected with risk-free bets among members of theexchange; and a piece of evaluation software executing on the computersystem, the piece of evaluation software providing an evaluation indexfor each member of the exchange, which is used to police risk-free betson the exchange.
 2. The computer system of claim 1, further comprising abet forest that is implemented in a database, the bet forest includingclasses of bets to allow a bettor to find a location to list a bet or towager a listed bet.
 3. The computer system of claim 1, furthercomprising a bet listing wizard, the bet listing wizard assisting abettor to list a bet by forming a bet proposition sentence.
 4. Thecomputer system of claim 1, further comprising a piece of accountssoftware that manages funds of various accounts connected with membersof the honor-based betting exchange.
 5. The computer system of claim 1,further comprising a piece of bet matching software, the piece of betmatching software determining whether a bet to be listed issubstantially similar to another bet already listed in a bet forest. 6.The computer system of claim 1, further comprising a piece of withdrawalsoftware, the piece of withdrawal software allowing a bettor to withdrawa listed bet or to withdraw a wager on a listed bet.
 7. The computersystem of claim 1, further comprising a piece of settlement software,the piece of settlement software tracking declarations of winners andlosers and causing the accounts software to transfer funds from losersto winners.
 8. A computer-implemented method comprising: accessing anhonor-based betting exchange by a first member to accept terms of anoffer of a second member regarding a bet; and rejecting the acceptanceof the first member if a piece of honor rating software determines thatan honor rating of the first member fails to meet an honor ratingthreshold specified by the second member, the honor rating beingrecalculated over time by the piece of honor rating software dependingon wagering statistics and behaviors of the first member including hisrefusal to pay on a bet he wagered.
 9. The computer-implemented methodof claim 8, wherein prior to accessing the honor-based betting exchangeby the first member, the offer is upsold in one or more classes of betswithin a bet forest by the second member.
 10. The computer-implementedmethod of claim 8, wherein the recalculation of the honor ratingincludes calculating a first component of the honor rating from aproduct of a performance average and a feedback average.
 11. Thecomputer-implemented method of claim 10, wherein the recalculation ofthe honor rating includes calculating a second component of the honorrating from a remainder formed from the first component of the honorrating as a minuend and a welch/withdrawal multiple as a subtrahend. 12.The computer-implemented method of claim 11, wherein the recalculationof the honor rating includes calculating a third component of the honorrating by a product formed from the remainder and a last five betsmultiple.
 13. The computer-implemented method of claim 12, wherein therecalculation of the honor rating includes calculating a fourthcomponent of the honor rating by a sum of an e-mail verification factorand the product formed from the remainder and the last five betsmultiple.
 14. A computer-readable medium having computer-executableinstructions stored thereon for implementing a computer-implementedmethod, comprising: accessing an honor-based betting exchange by a firstmember to specify new terms different from terms of an offer of a secondmember regarding a bet; and accepting the new terms of the first memberif the honor-based betting exchange determines that the new terms arewithin an acceptable range and if a piece of honor rating softwaredetermines that an honor rating of the first member meets an honorrating threshold specified by the second member.
 15. Thecomputer-readable medium of claim 14, wherein prior to accessing thehonor-based betting exchange by the first member, the offer is upsold inone or more classes of bets within a bet forest by the second member.16. The computer-readable medium of claim 14, wherein the recalculationof the honor rating includes calculating a first component of the honorrating from a product of a performance average and a feedback average.17. The computer-readable medium of claim 16, wherein the recalculationof the honor rating includes calculating a second component of the honorrating from a remainder formed from the first component of the honorrating as a minuend and a welch/withdrawal multiple as a subtrahend. 18.The computer-readable medium of claim 17, wherein the recalculation ofthe honor rating includes calculating a third component of the honorrating by a product formed from the remainder and a last five betsmultiple.
 19. The computer-readable medium of claim 18, wherein therecalculation of the honor rating includes calculating a fourthcomponent of the honor rating by a sum of an e-mail verification factorand the product formed from the remainder and the last five betsmultiple.